Tomorrow the Extractive Industries Transparency Initiative (EITI), a global scheme of 51 implementing countries that aims to stop corruption in the oil, gas and mining industries, will meet in Bogota to make critical decisions about a game-changing measure known as project-level reporting.

The EITI requires oil, gas and mining companies to report details about the trillions of dollars they pay to governments across the world for the rights to natural resources. The reporting requirement applies equally to governments who must publish the receipts, enabling citizens in resource-rich countries to follow the money and ensure it’s used for their benefit instead of lining the pockets of corrupt elites.

In most cases however, EITI reporting doesn’t go into enough detail. Payments are generally disclosed only at the company level. So if a company operates five oil projects in a country, often its payments from each project will be lumped together and reported as an aggregate sum. Although this kind of reporting is a step in the right direction, it still allows companies or governments to hide payments from individual projects, which can reach into billions of dollars from a single project – and can easily go missing.

A new Global Witness investigation highlights the need for EITI countries to ensure payments are reported separately for each oil, gas or mining project. Our research shows that between 2013 and 2016 the mining giant Glencore redirected over $75 million to Dan Gertler, a controversial businessman accused of bribing senior officials in Democratic Republic of Congo to advance his mining interests.

The payments arose from Glencore’s Katanga mining project in Congo and, under the terms of the original contract, should have been transferred to the Congolese state. Instead the money was redirected to Dan Gertler’s Africa Horizons company, registered in the Cayman Islands.

Glencore’s disclosures in Congo’s EITI reports – a relatively rare example of project-level reporting in the EITI – played a critical role in revealing that the payments were being redirected. Glencore admitted the payments were made to Gertler. Gertler contests accusations of wrongdoing in his dealings in Congo.

This case highlights why all 51 countries that follow the EITI’s rules need to implement project-level reporting. Corruption happens at the project level in the oil and mining industries, and there’s no way of know for sure where the money is going unless payments are reported at this level of detail.

Pressure from campaign groups including Global Witness prompted the EITI to adopt project-level reporting in the EITI’s global standard in 2013. But the measure has been strongly resisted by a small number of oil companies including Chevron and Exxon, who advocate a much weaker standard for disclosing payments. After three years’ of stalling, project-level reporting has still not been implemented across EITI countries.

There’s no reason why this can’t be done. A small number of EITI countries have published reports that include project-level payment disclosures, including Indonesia, Ghana and Iraq, as well as Congo. Since 2013, 30 countries have introduced laws that compel their oil, gas and mining companies to report payments at the project level, including the UK, Canada, France and Norway. In the UK alone, over 80 extractive companies have disclosed project-level payments worth around $100 billion since 2015, with no ill effects.

​The EITI is lagging behind. Moving at this embarrassingly glacial pace means it risks being eclipsed by global developments. The Bogota meeting is an opportunity for the EITI’s international board to show leadership and agree to bring the requirement for project-level reporting into effect. Otherwise oil and mining companies will be able to continue making payments in secret, and money that resource-rich countries badly need will continue being stolen.

ResourceProjects.org is an open-source repository of data on oil, gas and mining projects across the world. It provides a platform to collect, display, download and search extractive project information using open data. It aims to harvest data on project-by-project payments to governments—based on recent mandatory disclosure legislation in the EU, U.S. and Canada as well as EITI reports—and link it to associated information about the project from a variety of sources. The platform will make it easier for journalists, CSOs, researchers and government officials to search, access and download relevant data.

As we continue to develop the platform and connect it to new data sources, we are inviting contributors and collaborators to get involved.

Why does project-level data matter?

Projects are the physical, tangible presence of extractive operations in a country. A project is the mine that people see out of their window or the oil field along their coastline. But a project also has a concession area where it is located, one or more participating companies, contract documents detailing their obligations and payment information giving an insight into their economic contribution.

Governments and citizens groups can also use project data to model revenues and forecast budgets, such as in Ghana, where all interested parties could see how different oil prices affected the money available for the budget. Others, such as CCSI, Global Witness and Open Oil have modelled contracts to evaluate extractive deals, while IMF economists routinely use project-level information for fiscal design and technical assistance using their publicly available FARI model. Project information has a multitude of applications beyond fiscal modeling. It can be tied to spatial data to help better understand local impacts or environmental consequences, as highlighted by recent academic papers.Why did NRGI build this tool?

Information on extractive projects are scattered across different company and government websites, in EITI reports, as well as databases compiled by regulators, international organizations and civil society. It comes in multiple formats: PDF, spreadsheets and in computer queryable databases. These are rarely linked to each other at all.

ResourceProjects.org brings this information into one place. We are also working on linking the data gathered to other repositories on related entities, such as OpenCorporates for associated companies; ResourceContractsfor oil and mining contracts; and Open Oil`s concession map. All information on the platform is stored with details on what source it came from and how it was retrieved. By bringing this information together in a standardized and accessible format, we are allowing users to explore extractive projects with greater depth.How to get involved?

We are now looking for people who are interested in getting involved in the site. By the end of April, we will have added company disclosures from the U.K. that are starting to be released. Beyond the U.K., many companies are beginning to release project-by-project tax payment data. We would welcome any organisations or individuals who wish to lead on sourcing data from specific countries from upcoming mandatory disclosures.

Additionally we are inviting feedback as well as interested collaborators to help develop the site and its content. Further features and enhancements will be rolled out in the coming weeks and we are looking for partners who want to get more closely involved.

Finally, we are seeking to support the growing community of data users. Please sign up to the ResourceProjects mailing list if you want to keep up to date with what’s happening and how different organizations are using project-level information for improving resource governance.

So what can you do to find out about the owners of a company, if the information is not yet available in an EITI report? And even if it is, how can you verify that the information provided is actually correct? Financial regulators in many countries already require companies to disclose information on their shareholders and subsidiaries, so that our corporate filings database Aleph can help you to find it – and here is how.

​1) Who is controlling Kansanshi Mining PLC?

Let’s have a look at Zambia’s 2014 EITI report. On p.15, we find a chart with the top 5 payments to government by operating company. We see that combined, they make up for 70% of all payments to the government of Zambia. Of special interest is Kansanshi Mining Plc, which alone accounts for 32.86% of the payments. So what is the parent company of Kansanshi Mining Plc? Since we are dealing with the 2014 report, we will try to find a filing from 2014.

Search for the name of a company, ‘subsidiaries’ and ‘year’ in proximity of fifty words, the distance within which all included words should be from one another.

The search leads us to First Quantum’s annual information form for 2014, filed to the Canadian Stock exchange authority’s filing system SEDAR. On page 5, the report includes a hierarchical table with its subsidiaries. Here, we learn that First Quantum has an 80% interest in Kansanshi Mining Plc. Other top-players from the EITI report are also included in the list. Kalumbila Mines Ltd belongs to First Quantum, which has a 100% interest in the operation, as well as First Quantum Mining and Operations Ltd. But to whom do the other 20% of the Kansanshi operation belong? Further down on p.15, the project has its own section. First Quantum states that the other 20% of Kansanshi are owned by a subsidiary of Zambia’s state-owned ZCCM.

First Quantum Annual Report 2015, p. 5

In this case, we have been able to confirm the information provided by the ZEITI report, which includes a list of beneficial ownership structures on p.128.

2) Mopani Copper Mines Plc

​Things become more interesting, however, if we look at another company in the Zambia EITI report: Mopani Copper Mines Plc, the third largest contributor to government payments. Trying the exact same search terms in Aleph will lead to a miss. So we adjust them:

Search for the same terms as before, but without a date and widen the proximity from fifty to hundred.

The new search leads us to reports from mainly two companies; Glencore Plc and Katanga mining Ltd. Since we are looking for the ultimate owner, Glencore is a more likely candidate, because it is a multinational enterprise. A 2014 report is included, with a listing of ownership structures. On p. 186, we read that Glencore has a 73.1% interest in the Mopani Copper Mines Plc. This time, the information provided by the Glencore report does not match ZEITI’s information. According to the latter, Mopani copper Mines Plc is owned by 73.1% by First Quantum, 16.9% by Glencore Xtrata and 10% by a ZCCM subsidiary. Strikingly, we have the exact same figure for the majority owner, namely 73.1%. It looks as if the ZEITI report confused both companies.

Glencore Annual Report 2014, p.186 (highlight added)

​To summarise: using our Aleph database helped validating the figures stated in the EITI report, and in the second case, it even helped identifying mistakes. In other cases, the database can help filling out missing information about stakeholders. However, it is also important to note that the availability of information depends on the respective financial regulations. Keeping this in mind, the Aleph database proves to be a powerful tool to complement existing research as well as to support access to publicly available data on intercompany ownership structures.

Of course, all this is Aleph working networks of corporate affiliation structures – so it is not yet leading to the ultimate beneficial owners, which will always be a natural person. We will follow that up in a separate post.

This year’s introduction of mandatory disclosures in France and the UK will bring about a considerable amount of reports listing extractive companies’ payments to governments.The mandatory disclosures promise increased transparency, however, we are only at the beginning of a debate on how to best make use of the new data. One idea has already become apparent: comparing the mandatory disclosure data to EITI figures in order to find irregularities.​In the context of our involvement in Publish What You Pays “Data Extractors” programme, we have simulated how such a comparison could look like and formulated a few first thoughts, as detailed in this document. In this, we try to assess how these different sources referring to the same project relate to each other, in fact, how comparable they are after all. In the following, we would like to highlight a few aspects one has to take into account when comparing the two datasets.

Since the most actual EITI reports date from 2014, we needed to make sure the company reports were also covering that same year. This limited our comparison to the four companies in the Oil & Gas sector, that had both published payments to the government reports and that are operating in one of the few countries for which there already is a 2014 EITI report available. In total, we had six cases. The graph above represents the comparison between the EITI data (in blue) and the figures put forward by the companies (in red) on payments to government. In all cases, we found that the two reports had diverging figures. Deviations range from 0.84% (Mnazi Bay) up to almost 200% (Tullow in Rovuma Area 2&5). This begs the question as to why both reports fail to show the same results:

Staggered Reporting Cycles The reporting cycles may diverge. We can see this, for instance, when we want to compare Wentworth operations with the matching EITI reports. These are Mozambique and Ghana. In Mozambique, both reports cover the same timeframe, January 1st, 2014 to december 31st. However, in Tanzania, the EITI report refers to a cycle from June 31, 2013 to June 31, 2014, whereas Wentworth covers January 1, 2014 to December 31, 2014.

Project / Company Conflation Some reports relate to projects, other to companies. EITI reports often list payments by companies rather than by projects. However, there are companies that have only one project in the country, which they operate as part of a group. Statoil, for instance, is listed as a company in the EITI reports, and the figure for its payments in the Mozambique is higher than that in Statoil’s report. One reason being that Statoil has only 65% interest in the project. Without the other shareholding companies’ reports, we cannot have a full comparison with the EITI report.

What is a ‘payment to government’? There are differences in what counts as ‘payments to government’. We went through the reports and looked at the items listed as payments. Tullow’s report in the Deepwater Tano project in Ghana for instance includes a range of items that are not included in Ghana’s EITI report, such as VAT, local payroll taxes, withholding taxes or infrastructure improvement. It seems that these items are at the discretion of each EITI member state.

This exercise has shown one methodology to analyse the data around EITI reports and the new incoming data from the EU mandatory disclosures. Although such a comparison proves to be challenging, it might help to prepare a thorough analysis that could lead to a more transparent and standardised reporting, as well as, in the best case scenario, helping to find the missing millions.